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CX, RCM & Other Key Takeaways from HIMSS19

NelsonHall recently attended HIMSS19 in Orlando, Florida, the largest healthcare IT conference in the world, with over 45K delegates attending and 1.3K vendors in the exhibition. Here are three highlights from the many conversations we had about the state of the healthcare industry.

Obstacles to improving CX

The conversation about “consumer experience” in healthcare organizations invites harder questions about the challenges and obstacles to building customer intimacy. NelsonHall spoke with leaders at several BPO vendors about CX:

  • DXC Technology: Gurmeet Chahal (the new VP & GM - Americas Head for Healthcare & Life Sciences) suggested that the chief obstacle to providing better CX appears to be the governance and supply of better data. DXC observes this is especially true among provider organizations
  • Atos: Jack Evans (COO - Digital Health Solutions, North American Operations) suggested that healthcare organizations lack the capacity to effectively manage many constituencies and peer organizations “in a multi-source world” in ways that unite operations in their efforts to promote intimacy with customers across business units and channels
  • Genpact: Rakesh Nangia (VP, Life Sciences and Healthcare) suggested that healthcare organizations are stymied in their ambitions because they lack clarity on ownership of CX across the organization. While healthcare organizations are investing and experimenting to improve CX, healthcare organizations have thus far failed to reorganize budgets, people, and technology around CX priorities and measures under comprehensive and authoritative leadership.

Each of these vendors is making significant investments to provide better CX offerings to healthcare industry clients under the rubric of “digital transformation.” DXC has invested in internal data platforms that unite front-office and middle-office functions with security, workflow, and automation capabilities. Atos acquired financial services powerhouse Syntel for $3.4b in July 2018 and aims to make that company’s customer intimacy models relevant and compelling to healthcare clients in North America. Genpact also aims to transplant CX expertise from BFI into the healthcare industry. For more information on Genpact’s September 2017 acquisition of TandemSeven and its relevance to CX, see Rachael Stormonth’s blog here.

RCM in the crosshairs

Many BPO vendors see opportunity in the healthcare provider RCM sector. For background see my blog U.S. RCM Outsourcing Services Market Ripe for Consolidation. BPO vendors often see RCM industry fragmentation and inefficiencies as opportunities for consolidation and automation, and we found this view echoed by major BPO vendors present at HIMSS19. They use similar language to describe enticements and hurdles expanding business in this market segment, remarking on:

  • Consolidation in the provider hospital systems market, rationalizing RCM operations
  • The large scale of U.S. RCM services market
  • Labor arbitrage opportunities for smaller RCM services vendors to move operations offshore
  • Automation opportunities for IT-savvy BPO vendors to leverage scalable IT platforms
  • The relatively low risk of taking over operations that have limited capital requirements and manage stable cash flows.

Depending on the vantage of the BPO services vendor, the relative immaturity of provider organizations’ procurement functions can be viewed as a positive or as a negative. Incumbent BPO vendors that have cultivated broadly-based, enduring relationships with providers enjoy significant barriers to competition. But those entering the space for the first time similarly must earn trust in complex, decentralized clinical and administrative constituencies (many of which are oriented by mission rather than profit) that prioritize “friends and family.” Several BPO vendors we spoke with appear to be actively exploring opportunities for expanding their businesses, cautiously, in the RCM market segment.

No new news on BPaaS

There was only limited discussion of moving healthcare operations root and branch into outsourcing arrangements. Cognizant has been advocating for healthcare payers of all stripes to focus their strategies and find efficiencies by utilizing its business process as a service contract (BPaaS) offering.  The sales cycle for such a deal lasts, we expect, for at least two years, but we aren’t seeing fruit from Cognizant’s efforts.

Furthermore, we didn’t hear new news from NTT DATA. With November’s Q3 financial results NTT DATA announced it had sealed a $200m deal with an as-yet unnamed payer client. The investor presentation had stated that a deal for application management services, BPO, and infrastructure services for a U.S. payer had been signed for a seven-year period with a total contract value of over $700m. However, we have yet to learn additional substantive details.

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